India A Step Closer To First Offshore Wind Energy Auction

Nearly eight years after we first covered news about India taking initial steps to set up offshore wind energy projects, the first government document seen as a precursor to a final auction has been released.

The Ministry of New and Renewable Energy recently issued an expression of interest document on its website. The Ministry wants to gauge market interest to set up 1 gigawatt of offshore wind energy capacity off the coast of Gujarat, western India.

Back in November 2010, we covered a news story stating that the Ministry is planning to conduct a survey to establish the generation potential for offshore wind energy. The survey was supposed to take two to three years to complete. There is no word on whether this survey has indeed been completed or not.

In 2015, the Ministry approved an offshore wind energy policy that outlined the various approvals project developers would require to set up the projects, the various agencies that would be involved in the approvals, and so on.

Late last year, the Ministry announced that it plans to hold auctions for 5 gigawatts of offshore wind energy capacity in 2018-19. Minster for New and Renewable Energy RK Singh stated that a feasibility study ongoing at one of the proposed sites is in progress, while a similar survey would begin at two more sites soon. Apart from Gujarat, offshore wind energy projects are likely to come up in Tamil Nadu as well.

As of February 28th, 2018, India had an installed wind energy capacity of 32.9 gigawatts. The government has set a target to increase this figure to 60 gigawatts by March 2022. The government is expected to auction 10 gigawatts of wind energy capacity each in 2018-19 and 2019-20 to this effect.

Since India introduced competitive auctions in the wind energy sector last year, nearly 7.5 gigawatts of capacity has been allocated to project developers. Minimum tariff bids in these auctions have collapsed by nearly 30% in a matter of just 12 months. Offshore wind energy auctions are expected to be highly competitive as well, even though the capital cost of at least the initial projects is expected to be high.

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